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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> King v HM Inspector Of Taxes  EWCA Civ 1518 (3 October 2001)
Cite as:  EWCA Civ 1518
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(MR JUSTICE JACOB)
Wednesday, 3rd October 2001
B e f o r e :
MR JUSTICE BODEY
|JAMES MURRAY KING|
|- v -|
|ANNE MARIE WALDEN|
|(HM INSPECTOR OF TAXES)|
Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2AG
Telephone No: 020 7421 4040
Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
The Defendant did not attend and was unrepresented
Crown Copyright ©
Wednesday, 3rd October 2001
"Having considered the Appellant's arguments in detail we return to the question as to whether there was neglect or wilful default in the rendering of the returns for the years of the later original assessments. In the light of the evidence before us we are satisfied that the appellant did make inadequate returns for those years as he omitted guest house profits and bank interest. We therefore find that there was neglect. We also find that the appellant deliberately and intentionally failed to make correct returns for the years of the later original assessments knowing that such failure was wrong; undeclared profits were established in the 1991 Decision and failure to declare them was wilful default. We therefore find both neglect and wilful default proved for the years of the later original assessments."
"We conclude therefore that, in relation to the penalties, the 1991 decision is final and conclusive. That means that the appellant cannot re-open the findings of wilful default and neglect, and the amount of tax due, but can adduce material relevant to the extent of culpability and thus to the level of the penalty. In relation to the years of the later original assessments, where there were no findings of wilful default or neglect it is open to the appellant to argue that there was no wilful default or neglect."
"Our conclusion on the fifth issue is that, in relation to years for which there were no binding findings of neglect, the Appellant did negligently submit incorrect returns within the meaning of section 95(1) and submitted an incorrect account to the Special Commissioners."
"At the very least the decision of the 1991 Commissioners was a 'cogent factor' for the 2000 Commissioners. Here it is well worth standing back for an overall view of the position as regards Mr King. The fact is that over the years he acquired a series of properties used for lodging houses. There is no reasonable explanation of how he came by the money to buy these properties, otherwise than from profits of the businesses. That was the position in 1991, when the Crown did not know of Roundwood Lodge. It remained the position thereafter - the discovery of Roundwood Lodge only making things worse."
"Overwhelming on any reasonable view of the meaning of 'wilful default or neglect.'"
"Fraud was not alleged... but what one has here are fanciful stories of partnership - partnership with infants, partnerships without partnership accounts, partnerships with no injection of capital or work by partners, partnerships with no profit distribution and clearly inadequate disclosure to the revenue. In my judgment there was no room whatever for any other finding than wilful default or neglect whatever these shades of meaning those words may have."
"As to whether Mr King was 'negligent', I have no doubt that he was. Mr Woolf argued that the benefit of any doubt as to negligence should be given to the taxpayer. With that I agree. But when one finds a taxpayer offering a variety of improbable stories as to the nature of the business conducted and the accumulation of substantial property in the taxpayer's name, one is compelled to the view that his conduct in making tax returns and supplying information has, at the very least, been negligent."
"In the normal case the person who has made an undisclosed profit is the person responsible for making a return. The establishment that undeclared profits have been made will almost automatically mean that failure to declare them in the tax returns must be wilful default."
"I see no real prospect of any different conclusion to that reached by the judge."
"The idea that the applicant did not know he owned Roundwood Lodge is, on the findings made, untenable."
"1. Mr King's general memory (delayed) is significantly impaired.
2. Without access to his medical notes it is difficult to know the date of onset/duration of the impairments. He reported that a psychologist had assessed him previously, but he had never been given a copy of the report.
3. The pattern of Mr King's scores suggests that his impairments are the result of an organic, medical condition, rather than a function of any psychological distress.
4. Mr King's test profile is consistent with what I would expect from a patient who has suffered from a stroke. However, it is beyond my level of expertise to make a medical diagnosis. The opinion of a Consultant Neurologist should be sought for the latter."